Setting out the welcome mat for investors

A MENDING the Constitution to loosen restrictions on foreign investment and ownership is going to be, or at least should be, a make-or-break issue in the 2016 election campaign.

Vice President Binay, who is officially a candidate for the presidency, has given the issue a nod, saying in his “true state of the nation” campaign speech in Cavite on Monday that he would push for amending the economic provisions in the Constitution if he were elected.

In his expansive speech to the Asia CEO Forum last week, Senator Ferdinand R. “Bongbong” Marcos Jr. mentioned it briefly, as one of the ways the country could attract more investment.

Liberal Party standard-bearer Mar Roxas, having not yet gotten over the euphoria of having been “anointed” by President BS Aquino 3rd, has not offered an opinion on the topic.

The simple way to solve the problem, the method presented in the handful of abortive attempts to push the initiative through Congress over the past dozen years or so, is not to change the existing provisions and the 40 percent limitation on foreign ownership they impose, but simply to add the phrase “except as provided by law” in the appropriate places.

It is a sensible idea, one that is long overdue, and the next president should make it an early priority of his administration.

Amending the Constitution in this manner answers the critics who claim – though without really being able to present actual arguments to back their assertion – that allowing greater foreign ownership of assets in the Philippines will lead to exploitation, because it retains the current restrictive framework as the default state. It allows the government flexibility in setting limits and conditions on investment in particular sectors, thus making more effective economic planning possible; not every industry or business sector will benefit from full foreign ownership at any given time, others probably will. Providing a means to legally bypass the Constitution’s arbitrary limits when necessary allows completely objective assessments.

Every country in the region that is currently enjoying some level of economic growth has had to at some point ease its own foreign investment restrictions, and the disadvantaged neighbors who still trail the Philippines in terms of economic strength, places like Cambodia, Myanmar, and even isolated Laos, have evidently realized they must do the same, and are catching up at an impressive, though alarming rate.

And we have to ask, what exactly are opponents of liberalization protecting? While we certainly agree that Filipino businesses deserve to have an advantage in their own country, when protections ostensibly for the sake of business turn into protections for a handful of giant conglomerates controlling every aspect of the economy to the detriment of Pinoy consumers, we believe those measures have clearly outlived their usefulness.

Amending the economic provisions of the Constitution simply must be done. Other ideas that have been suggested, such as setting up more special economic zones and revising the restricted investment lists, are not without value and are worth exploring as well, but they are still subject to the same constitutional boundaries. They are at best only partial solutions.

4 Comments

Enabling law is essential for the investors to put their money in the Philippines. And hirap ,walang capable person in the government that is able to manage the economic and trade development in ths philippines. Sorry, much as I would like to depend Pnoy on this. He doesn’t have the capable team to handle this. Most of them are political appointee that does not have experience and knowlege about managing the economic development of the philippines.

That simple phrase “except as provided by law” does not only sound smart, it seems profound. It allows tremendous flexibility not only in allowing foreigners to enter specified areas of investment but also gives Congress the power to DISALLOW it when prejudice against Filipinos can be demonstrated by simply resorting to the constitutional default. I wonder how any politician can argue against this.

Our Constitution is far from perfect. But without a Con-Con, Congress has the easiest path to propose a change. The problem is that Congress does not represent the people equally. This is what should be changed. Elect one Senator from each province. Move the Capitol out of Manila. Prohibit the federal government from interfering in local provincial governments except when intrastate commerce is involved.

Once these are done then our Congress can focus on the real things necessary to improve our nation.

The forces of globalization of economies are slowly squeezing on our necks. We should welcome it. More capital, more jobs, more efficiency, more competition, more business activities, more technology, more power, more infrastructures, more condos…..all these plus more at LESS PRICE. What more could be clearer than that! Hell with protectionism for a few and let the market forces work its magic….supply and demand….back to basics, Philippines!